Parent company of Safeway and Vons tries to discourage takeover

NEW YORK — Safeway adopted a plan to prevent a hostile takeover after learning of a significant accumulation of its stock by an unnamed investor.

The announcement Tuesday sent shares of the grocer spiking to a five-year high.

So-called “poison pill” plans allow existing shareholders to acquire more stock at a discounted rate to discourage a takeover by an outside entity.

Safeway’s defensive plan becomes exercisable if a person or group acquires 10 percent or more of the company’s common stock, or 15 percent by an institutional investor.

A representative for the company, which has about 1,400 locations in the U.S., wasn’t immediately available for comment.

The grocer, which also operates Vons, noted that it has taken a number of strategic initiatives to increase value for shareholders, including the recent $5.7 billion sale of its Canadian unit and the initial public offering of Blackhawk Network, its gift and prepaid card unit.

Like other traditional supermarket operators, Safeway is also trying to adapt amid growing competition from big-box retailers, drug stores and specialty stores that have been expanding their grocery sections.

A centerpiece of Safeway’s push to hold onto customers has been a loyalty program that offers personalized deals based on a shopper’s past purchases.

In its fiscal second quarter, sales at company stores open at least a year rose 1.2 percent. By comparison, same-store sales at rival Kroger Co. rose 3.3 percent in its most recent quarter.